The drive is a regular SATA drive, but you need a specific SATA chipset to connect it. PCI cards with those chipsets can be gotten cheaply (around 10 bucks)
However the complexity of getting the keys depends on the type of drive in your 360, newer models have newer drive types that are harder to hack. You can find guides that tell you how to check the drive type without opening the 360.

 

If you have your CPU keys (like you would if you have a JTAG/RGH/RJTAG box) then you can pull the DVD keys directly from the NAND image using something like 360 flash tool . How easy the thing is to flash after that might vary though, and I am not sure what became of the homebrew/onboard DVD flashing stuff.

As for 2) there might be something in a vendor somewhere, I have not looked for a while though.

 

If you want to have yer box R-JTAG'd or RGH'd then don't bother flashing yer drive.
You can execute games from the internal HDD (and upgrade it as well)

 

You only need to flash your DVD drive if you want to run backups or homebrew from discs. You can run games from the internal drive, as DinohScene said, or flash drive, external hard drive as well.

 

What 360 model is it?

 

You'll need a probe 3.
And depending on the chipset of yer PC, you also need a X360 USB Pro

 

Keep in mind the R-JTAG and Slim Proto have been discontinued, if you're in no hurry it may be worth waiting for the Xecuter CR4 which will apparently provide faster boot times and be easier to install.

http://team-xecuter.com/xecuter-cr4-xl-is-finally-revealed/

 

So its safe bet to wait for the CR4? Then?